Food supply chain: new rules to clamp down on unfair trading

The draft EU law to protect farmers against unfair trading practices, by buyers, will be debated in plenary on Monday, and voted on Tuesday.

New rules, provisionally agreed with EU ministers in December, seek to introduce a better balance in the food supply chain. They blacklist certain practices, such as late payments for delivered products, late unilateral cancellations or retroactive order changes, refusal by the buyer to sign a written contract with a supplier and the misuse of confidential information.

Other practices, such as returning unsold products to a supplier without paying for them, forcing suppliers to pay for the advertising of products, or imposing discount costs onto the supplier, would also be outlawed unless pre-agreed in the supply agreement.

The European Parliament has repeatedly called for measures to tackle unfair trading practices (UTPs) in the food supply chain, since 2010, after adopting the resolution on fairer revenues for farmers and better functionality of the supply chain.

According to Commission estimates, agriculture and food processing SMEs in the EU lose some €2.5 - €8 billion per year (1% - 2% of their turnover) due to UTPs.